This is the part of my job I work at extremely hard because I know the stakes are high but it doesn’t need to be like this. I’m in the midst of negotiating with underwriters (insurers) for a 27 year to try and get covers after seeing me at one of the happiest times in their life, having just purchased their first home. Everything is on the up and life is looking bright as ever, but there is underlying risk they cannot see, could not foresee.
A home while an asset also represents an exposure/debt on the other side of the balance sheet, it’s not time to party, yet. The very next question is always, OK, so what would do if we couldn’t work due to sickness or injury, how would we continue making the home loan repayments? Now the issue of personal insurance comes into the mix and all of a sudden, something you’ve never even given thought to, is suddenly really, really important.
Have you considered whether you’re even eligible for covers? You might be of the thought that you’re healthy, but are you? When was the last time you had a check up? Did your GP order you a blood test last time because you were feeling lethargic and did he skim over the readings but mention cholesterol was high or some other reading but because we are more tolerant as a society he passes it off as within the ‘new’ normal? Did you leave your last job because, well to put frankly, your manager was an ass and the culture was abusive, you’ve quickly forgotten now, but there was a period there you took mental illness leave and was referred to a physiologist, you were prescribed some medication to ease your anxiety, it’s all behind you now though. Oh but wait, work life is grand, can you believe it, ‘I got hired/head-hunted by another company, they’ve got me on casual but are paying me 20% more, full time hours though,I’ve scored’, but have you?
I could rattle off endless situations that I have come across just like those above that have either ended in a straight decline or nil offer on covers and or acceptance with exclusions or price loadings, all of a sudden you’re now in a position where everyday is a gamble riding on your health and vitality to work no matter what the case. It’s a gamble worth an easy $3,000/mth in repayments of a average mortgage or the total loss of ever owning that home not to mention any supplementary income needs for your spouse or children. The world doesn’t stop just because your income does, so I suggest you protect for the biggest asset you’ve got, your income.
Insurance is a grudge purchase they say, I’m in the camp that peace of mind is priceless and covering your back end is assurance that you are going to dictate your future.
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Image courtesy of [Stuart Miles] at FreeDigitalPhotos.net